ATHENS, Greece (AP) — Greece has avoided imminent bankruptcy after its international creditors finally agreed to give it the money it urgently needs but the cash-strapped country's economic distress is likely to drag on for years to come.
After three weeks of negotiations, Greece's euro partners and the International Monetary Fund agreed to release a vital loan payment and introduce a series of measures designed to reduce the country's massive debts to a more manageable level within a decade.
"There remains the potential for this deal to fall apart in the medium term as there are a lot of moving parts and it is a long way away from the permanent fix that the IMF had been insisting upon," said Gary Jenkins, managing director of Swordfish Research.
For three years, Greece has been struggling to convince markets as well as its creditors that it can get a grip on its public finances, which spiraled out of control following the financial crisis of 2008.
Without the bailout money, the country would be staring bankruptcy in the face together with a possible exit from the 17-country eurozone, with potentially chaotic repercussions for the world economy.
—A 15-year extension of the maturities of loans from other countries and the eurozone's bailout fund, the European Financial Stability Facility, and a deferral of interest payments by Greece on EFSF loans by 10 years.
After three weeks of negotiations, Greece's euro partners and the International Monetary Fund agreed to release a vital loan payment and introduce a series of measures designed to reduce the country's massive debts to a more manageable level within a decade.
"There remains the potential for this deal to fall apart in the medium term as there are a lot of moving parts and it is a long way away from the permanent fix that the IMF had been insisting upon," said Gary Jenkins, managing director of Swordfish Research.
For three years, Greece has been struggling to convince markets as well as its creditors that it can get a grip on its public finances, which spiraled out of control following the financial crisis of 2008.
Without the bailout money, the country would be staring bankruptcy in the face together with a possible exit from the 17-country eurozone, with potentially chaotic repercussions for the world economy.
—A 15-year extension of the maturities of loans from other countries and the eurozone's bailout fund, the European Financial Stability Facility, and a deferral of interest payments by Greece on EFSF loans by 10 years.
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